Chinese inflation spikes on food costs

By Catherine Tymkiw, producer


NEW YORK (CNNMoney.com) -- Higher food prices continue to be the main driver of inflation in China, raising the likelihood of an imminent interest rate hike as the country tries to reel in its red-hot economy.

Consumer prices rose 5.1% for the 12 months ended Nov. 30, according to government data released early Saturday in China. That comes on the heels of a 4.4% jump in October. And once again, a surge in food costs is the culprit. Food prices rose 11.7% during the period.

Excluding food prices, China's CPI edged up only 1.9%.

Compare that with the United States, where the CPI has been sluggish for months. In October, the U.S. CPI increased a modest 1.2%, according to the Bureau of Labor Statistics. Excluding the volatility of food prices, the U.S. CPI rose 0.6%.

The U.S. trade balance narrowed to a more-than-expected $38.7 billion, bringing the U.S. trade deficit to a 9-month low.

But China is a different story.

China said its trade surplus narrowed to $22.9 billion in November -- a 16% decrease over October's $27.2 billion surplus. China's exports jumped 34.9%, while the country's imports rose 37.7%.

Fears of runaway inflation have led to rising speculation that the People's Bank of China will move to raise interest rates as early as this weekend.

Just one week ago, China said it would be more "prudent" about its monetary policy in 2011. And on Friday, the People's Bank of China raised the reserve requirement ratio for its banks by a half-percentage point for the third time in a month.

Month by month: CPI rose 1.1% in November, on a monthly basis. The increase was largely due to higher food prices. Meanwhile, core CPI was up a more modest 0.6%. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.23%4.19%
15 yr fixed3.26%3.27%
5/1 ARM3.70%3.38%
30 yr refi4.22%4.18%
15 yr refi3.26%3.26%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,279.74 13.75 0.08%
Nasdaq 4,579.79 -13.64 -0.30%
S&P 500 2,010.40 -0.96 -0.05%
Treasuries 2.59 -0.04 -1.60%
Data as of 6:09pm ET
Company Price Change % Change
Yahoo! Inc 40.93 -1.16 -2.74%
Microsoft Corp 47.52 0.84 1.80%
Bank of America Corp... 16.95 -0.09 -0.53%
Oracle Corp 39.80 -1.75 -4.21%
Facebook Inc 77.91 0.91 1.18%
Data as of Sep 19

Sections
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.